Making Private Public Partnerships (PPPs) work

SHARE | Thursday, 26 April 2018 | By *michael E. Goldberg

Patel Barwabatsile is working with an interesting public-private partnership that supports innovators and entrepreneurs in Africa.

I first met Patel Barwabatsile at the annual Microsoft Innovation Centre (MIC) Summit at Microsoft in Seattle in October 2014, where I was invited to speak with MIC leaders like Patel about Beyond Silicon Valley. The summit enabled fantastic exchanges of ideas because it included roughly 70 MIC managers from around the world. The MIC in Botswana is a public-private partnership between Microsoft and the Botswana Innovation Hub, and Patel was its director. The MIC provides the services that help new ventures deliver innovative IT- and communications-based products. He landed at the MIC because he wanted to be part of developing diversified growth options for Botswana.

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After the conference, the US Embassy in Botswana invited me to travel to Botswana to conduct meetups with entrepreneurs and supporters of entrepreneurship. Before my spring 2015 journey to Botswana, I contacted Patel to invite him to be involved in these efforts. I was thrilled when he agreed to host the meetups at the MIC facilities in the Botswana Innovation Hub.

A MIC serves a social purpose in that it aims to help a region improve and become competitive in the area of software and information technology, and it also serves a commercial purpose of helping Microsoft access global customers. Microsoft always sets up its MICs as public-private partnerships. The company finds partners in each community—local governments, academic institutions, industry organizations, and software and hardware vendors—and they jointly design the MIC for that community’s needs. The partners operate the MIC by providing services that stimulate the local software economy. The support they offer includes skills and professional training, industry partnerships, and innovation support.

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I talked about the impact of MICs around the world with then Microsoft global program manager of MICs, Ed Steidl. “What’s interesting from an impact perspective,” he said, “is that although there are various stakeholders in the markets—be it investors, government, or private enterprise—and they all sort of know each other, they never really sat around a table and talked about how they could move forward together and help the ecosystem move to the next level.

In June 2015, I travelled to Botswana. I took a taxi from the airport outside Gaborone, Botswana, one of Africa’s fastest growing cities, into the centre of the city. The US Embassy in Botswana sponsored my trip with the idea that I would help some Batswana explore how they could develop an entrepreneurial ecosystem and diversify the growth economy. Over the next few days, I’d be conducting a series of meetups.

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One of the most sparsely populated countries in the world, Botswana is flat and landlocked; desert and vast expanses of savanna occupy 70 percent of its land mass. The wildlife is (to this Cleveland boy) incredible, featuring lions, giraffes, zebras, and one of the largest elephant populations in Africa. The country has an amazing array of flora, including the baobab tree, which figures prominently in Antoine de Saint-Exupéry’s classic 1943 children’s book, Le Petit Prince (The Little Prince). The tree is a succulent, holding great quantities of water, which, among other life-giving qualities (its fruit has legendary, positive nutritional benefits, for example) is known as “tree of life.” The tree is revered in that it can grow for thousands of years.

Few sights in the world are more timeless and gorgeous than the sunsets over the Botswana savanna, the baobab tree in the foreground, with a few fire-orange clouds in the background, and in the middle of the vista, the silhouette of a “tower” (group) of giraffes.Botswana is the cradle of civilization, especially the Okavango Delta, one of the largest inland deltas in the world, and humans here go back at least 100,000 years.

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As one of the strongest and longest-running democracies in Africa, the country enjoys a good degree of political stability. This trip to Botswana was a particularly meaningful trip for me because in neighbouring South Africa, I had launched my post-college career journey in the field of international development. That journey didn’t begin with entrepreneurship as its explicit goal, but looking back, I think it provided a spark that eventually led me to entrepreneurship. I spent three years in South Africa (from January 1993 through December 1995).

For a year, I worked with WorldTeach to help launch a program to bring American teachers to work in rural, racially segregated schools in South Africa, and I served as a teacher myself in the community of Grabouw on the Western Cape. I then became a program officer for the National Democratic Institute, developing and implementing voter education programs in preparation of South Africa’s first democratic national and local government elections in 1994 and 1995. During this time, Nelson Mandela was elected the first black president of South Africa.

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During my three years in South Africa, I visited Botswana as a tourist. I visited it again on my honeymoon in 2001. So, as I began my 2015 trip to Botswana, I felt as if I were coming full circle, except that now I had the opportunity to work with aspiring entrepreneurs. Education, voting rights, and entrepreneurial endeavours—all of these seem, upon reflection, to be on the same continuum of positive change, which I find very gratifying.

In Botswana, I remember being struck by the downtown Gaborone layout, how it had changed since my long-ago visits. Where is the centre of things? I wondered. I figured out there are two centres to the city—a new centre with new buildings, the city business district, called the CBD, and then the traditional government centre, the Main Mall, and Government Enclave. This dichotomy illustrates the changes occurring in Botswana today, where you can actually see growth in the shape of the buildings private developers have built in the new downtown. You can see an emerging skyline of a growing economy.

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In the south, Botswana borders South Africa, and in the north, it borders Zimbabwe and Namibia with a tiny section of border touching Zambia (there is debate about whether Botswana and Zambia share a border). Botswana is a relatively stable nation politically and has seen good economic growth for 50 years, but its growth stems from the strength of one main industry—diamonds.

When Botswana became an independent country in 1966, it was one of the world’s poorest nations. In 1967, when geologists with the De Beers Group of Companies discovered diamond deposits in Orapa in the Central District (northwest of the village of Serowe), Botswana began its ascent, becoming the largest producer of gem-quality diamonds on the planet and one of the fastest-growing economies in the world. Diamonds are special because as precious gems, they rarely lose value.

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For about a decade, Botswana’s diamond production (in terms of carats) has been declining, partly because of weak demand during the now nearly decade-old global financial crisis. Diamond mining is projected to end in the 2030-2050 time frame (that is, the deposits will run dry by then). Botswana also has copper and nickel mines and a good cattle industry, but those industries distantly trail diamond mining in terms of wealth creation and growth (50 percent of government revenue comes from the diamond industry, and 80 percent of exports are diamonds).

The Botswana government and citizens are well aware that the country needs to pursue a path of economic diversification. Enter the Botswana Innovation Hub, a science and technology park located in Gaborone near the international airport.

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At its core is an innovation building that consists of roughly 25,000 square meters of space—auditoriums, restaurants, data centres, conference facilities, a gym, cafeterias, training rooms, and meeting rooms. The goal for this place is to be a physical symbol of Botswana’s support for research, development, innovation, and entrepreneurship; a nexus for knowledge creation and innovation.

As director of the MIC at the Botswana Innovation Hub, Patel said that the Innovation Hub can “drive other industries and businesses to develop, and that is a way to drive the economy from mining.” He continued, “I think the good things about doing business in Botswana are that you not only have access to the Botswana market but the larger outside market of about 100-something-million people.” (This includes Botswana’s neighbours of South Africa, Zimbabwe, Namibia, and Zambia.) “Another good thing,” he added, “is that you have access to a good middle-class population, so the buying power is quite high.”

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Patel thinks, for example, that the telecom industry has penetrated the Botswana market with valuable products and services. Prior to Beyond Silicon Valley, Patel had not participated in many MOOCs. He grew up with nine siblings in a village 50 kilometres west of Gaborone. He attended the University of Botswana, the only institute of higher learning in Botswana, but left and ultimately graduated in 2006 from Carleton University in Ottawa, Canada, with a degree in Computer Systems. Since then, he has undertaken continuing education through receiving a project management certificate from the University of Stellenbosch Business School’s Executive Development Program in South Africa and an innovation certificate from a Stanford University professional program that is a partnership between the Stanford School of Engineering and the Stanford Graduate School of Business.

Patel told me that in Botswana, MOOCs haven’t been common. People who live in rural areas of Botswana do have increasing levels of access to the internet, but they still find it easier to take a course in person at a nearby school or the country’s university.

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At the MIC in Botswana in 2015, we had four meetups with stakeholders that included entrepreneurs, capital providers, government officials and policy makers, and accelerators. Each meetup included from 5 to 50 people, and the overall number of individual participants probably totalled 75.We examined topics like tax incentives for angel investors, government and donor funding for seed accelerator programs, government-sponsored venture capital funds, and other programs the government offers entrepreneurs.

Banusi Mbaakanyi is the Chief Commercial Officer from the Economic Diversification Unit of the Botswana Ministry of Trade and Industry. She seemed to see benefit from the conversations that took place during the roundtables and meetups Patel helped host at the MIC. She told me that although Botswana’s leaders had common interests, they had not yet “engaged one another in a round table manner to find solutions.” At the risk of being repetitive, I think that’s the power of meetups—a lot of people have innovative ideas, but if they aren’t communicating them, then nothing happens. Awareness is power.

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Patel said he most benefited from the government and policy roundtable at which participants laid out the real challenges entrepreneurs face and possible policies to support them. This included potential involvement with a US organization that was helping the Botswana Innovation Hub sponsor an angel investing capability. He also found the financial institutions and banks roundtable helpful because MIC employees had been encouraging Botswana’s banks to add new ways of funding start-ups, and the participants identified tangible solutions. The meetups helped those conversations between MICs and financial institutions, in Patel’s words, “move a level ahead.”

The meetup participants emerged with concrete plans to support innovation-oriented entrepreneurs. “The roundtables were very helpful in looking at the issues and challenges of entrepreneurship in Botswana, especially the funding of technology-based start-ups,” Patel said. Participants expressed that the discussions about developing more angel investing capability were most useful.

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After I returned to Cleveland, the conversations continued, prompting a few people to sign up for Beyond Silicon Valley, through which they made additional connections, moving a step closer to their goals of supporting their local innovation ecosystems.

Other people invited Patel and additional meetup participants to participate in new academic and policy programs. He said some policies “were energized by this discussion in terms of entrepreneurship support, trying to create market access, and assisting people to get access to the market. The policies may be moving ahead slowly, but I think they were energized by the people involved in the discussions.”

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Because of his role at the MIC, Patel could access the knowledge and resources he needs for supporting the innovation ecosystem. At his office in the new science and technology park, he works hard to develop the ideas and partnerships that will advance IT- and communications-related innovations in Botswana, and he employs a public-private partnership mind-set. He seems to me to be skilled in combining the needs and aims of the corporate world (for example, Microsoft) with the needs and aims of having an impact on society.

I like one example of how he thinks about communications and connectivity. “In terms of working with connectivity solutions for better health care and education delivery, we have to make sure what we are putting in place is infallible and can reach a larger population at a very affordable price. We have to make programs affordable and accessible.”

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Another thing he works to achieve is to include both urbanites and rural residents in diversified economic growth. He understands the needs of both because although he lives in the nation’s capital, he grew up and his parents and other family members still live in the village of Molepolole in southeast Botswana. He still farms occasionally on a small farm his family owns outside Molepolole. He runs sometimes in the countryside. And he likes to photograph the landscape, especially admiring its colours and the way the sun looks above the savanna.

But what Patel says he enjoys most is the intersection of technology and economic development. He feels that the meetups in Botswana at the MIC did help advance the on-going conversation about how Botswana can use entrepreneurship to diversify its economy. He believes the biggest challenge preventing more innovation-oriented entrepreneurship is the scarcity of angel and venture capital funding, a common problem nearly everywhere but not least in developing nations and communities.

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And so Botswana is diversifying away from diamonds. I enjoyed returning to this beautiful country where I started my career as a young idealist. Most importantly, I think public-private partnerships like the Botswana MIC are crucial to growing entrepreneurship in developing economies. I’m thrilled the Beyond Silicon Valley course and meetups helped start dialogues and knowledge transfer at the facilities of the MIC in Botswana.

Note: After I wrote this chapter, Patel left the Microsoft Innovation Centre in Botswana and is running his own start-up in the media, telecom, and technology arena.

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* Michael E. Goldberg is Assistant Professor of Design and Innovation at the Weatherhead School of Management at Case Western Reserve University. The Chapter appears in his latest book titled Beyond Silicon Valley: How One Online Course Helped Support Global Entrepreneurs